Last week, the California State Assembly passed a year that would impact solar credits of those who have solar on their homes.
According to the bills author, Assemblymember Lisa Calderon (D-Whittier), Under AB 942, it aims to minimize the cost shift on non-solar ratepayers from existing solar-panel subsidy programs. After recent amendments, the bill requires new owners of a property with rooftop solar to take service under the Net Billing Tariff and eliminates the California Climate Credit, ratepayers’ share of Cap and Trade proceeds for solar customers. In total, AB 942 will save Californians$423 million next year and $3.6 billion between now and 2043.
On June 3, the bill passed out of the State Assembly in a 46-14 vote with 19 assemblymembers not casting a vote on the bill that would eliminate benefits of solar for some and shift the savings to others. Here is how assemblymembers in Contra Costa County voted:
- Yes – Anamarie Avila Farias
- Yes – Lori Wilson
- No – Rebecca Bauer-Kahan
- No – Buffy Wicks
The bill would undo solar contracts for approximately 1.5 million homes and renege on decades of commitments for those who purchased solar—thus reducing the value of solar for around 1.5 million homes in the State of California.
Under the bill, it requires homes that are sold or transferred to move from prior net metering for solar to a less impactful net billing tariff—making it less valuable to have solar on a home, causing some homes/solar to be underwater. Meaning, new owners of homes with solar get a lower rate.
“Solar power is an important part of our state’s renewable energy grid, but we have to reevaluate how our current solar subsidy programs impact Californians who may not be able to afford solar-panel systems,” said Assemblymember Lisa Calderon in a May 2 press release. “Our energy bills are becoming increasingly unaffordable, and we must address this ratepayer inequity.”
In a May 5, 2025 letter, the California Association of Realtors opposed the bill stating it would hurt middle and lower income households who have already invested into solar contracts. According to the letter:
“The California Association of REALTORS® (C.A.R.) must respectfully oppose AB 942 (Calderon). Homeowners who purchased solar systems and those who want to buy homes with solar panels should not be penalized for their commitment to invest in clean energy and lower their households’ sky- rocketing electricity bills.
Most solar consumers in California are under existing 20-year contracts that should not be violated. As amended, AB 942 retroactively cancels significant terms in contracts that were contemplated and relied on by solar consumers. As solar has become more affordable to install, due to new technology, financing options, and governmental incentives, the opportunities to solarize your home have increased in such a way that it has now become affordable for an expanding number of households to go green.
The in a May 16 letter, after the bill was amended:
AB 942 is supposed to address energy “affordability.” However, this bill would have the opposite effect. By retroactively forcing new owners that purchase properties with existing solar systems onto the Net
Billing Tariff (or another successor tariff), AB 942 will inject unnecessary uncertainty into housing transactions. Instead of reducing electricity bills for California’s ratepayers, it will simply raise the costs
of utility bills for hard-working families who purchase homes with solar systems, and for renters who have no control over when their building is bought and sold.
AB 942 goes even further and affirmatively penalizes solar customers by denying them access to a benefit that all ratepayers receive — the California Climate Credit. It defies logic to withhold the Climate
Credit from a residential customer that is actually producing clean energy onsite and still paying their monthly electricity bills.
Moreover, AB 942 has serious legal flaws. California has time and again affirmed that solar contracts pursuant to net metering tariffs are guaranteed for twenty years. This twenty-year guarantee attaches to
the solar system, not to the customer that owns it. When a homeowner or housing developer enters into a solar contract, they understand that the investment value of their solar system is preserved when they
choose to sell their property.
California should be doing everything we can to encourage the building of affordable and energy resilient homes. AB 942 directly undermines that goal.
According to FixTheShift, California’s Net Energy Metering (NEM) program was created in 1995 to encourage rooftop solar adoption. Three decades later, this outdated system forces those without solar to pay for massive subsidies to homeowners who can already afford solar — shifting billions of dollars annually to non-solar customers’ bills
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When a property is sold, the new owner switches to a more equitable system — resulting in an estimated rate relief of $203 million in 2026 and $2.5 billion from 2026 to 2043.
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Reallocate the California Climate Credit from solar customers to non-solar customers, providing estimated rate relief of $220 million in 2026 and $1.1 billion from 2026 to 2030.
More information:
- AB 942 (Calderon) – Assembly Bill Policy Committee Analysis
- April 23 via Edison: Correcting the Record on AB 942 and Rooftop Solar Reform
- April 21: Bill to cut solar panel benefits written by former power company exec: LAT
- According to CALSSA research, grid spending increased 130 to 260 percent over the past 8 to 12 years, directly correlating with rate increases.
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